What is Subsidy

Subsidy is a discount offered by the Government of India to provide necessary products to people at affordable prices across the nation. Subsidy is also identified as the transfer of a certain amount of money from the Government to an entity that further sells subsidized products to people. Subsidy is a part of non-plan expenditure of the Government, in which the subsidy cost is much lower than the actual cost of production.

Providing subsidies is an inevitable task across all the Governments of nations, worldwide. Most important types of subsidies in India are food, interest, petroleum, and fertilizer subsidies. Let’s further discuss various types, categories, schemes, and benefits of subsidy.

Note: All the above-mentioned subsidy schemes under Stand-up India are applicable all over India.

Also Read: What is Stand Up India Scheme

More about Credit Linked Capital Subsidy Scheme (CLCSS)

Credit Linked Capital Subsidy Scheme (CLCSS) is a Government initiated scheme under The Ministry of Micro, Small, and Medium Enterprises (M/o MSME) for technology advancement of Small Scale Industries (SSIs) in both rural and urban areas. Under this scheme 15% capital subsidy is offered to SSIs on loans up to Rs. 1 crore for the modernization of plant and machinery. Subsidies are also offered to MSMEs availing loans for technology upgradation. The calculation of the capital subsidy amount is based on the cost of acquired plant and machinery by the businesses.

Direct Benefit Transfer Scheme

Sometimes subsidies fail to solve the purpose they are introduced, as several times well-to-do sections of the society avail its benefits rather than people belonging to the poor sections of the society. Witnessing this disparity, the Government launched a direct benefit transfer scheme for the poor which was later linked with the Aadhar card of every individual or family falling below the poverty line.

Agricultural Subsidies provided to farmers in India

As per various economists, a subsidy is a failure if it fails to improve the overall economy of a country. For policymakers or Government initiated scheme members, the subsidy might be considered a success, if it helps in achieving any set target. Most of the subsidies do achieve economic or cultural targets, still are unable to match the expectations of the needy people. However, subsidy helps in raising the profits of people receiving benefits from subsidies offered by the Government and availed by the people of India.